Hello, YieldAlley readers! In this issue:
The May 2026 I Bond Rate Is Coming Into Focus
Middle East De-Escalation, Cool Inflation, and Strong Earnings Push Stocks to Record Highs
The Global Stock Selloff as Oil Fears Rise
Warren Buffett vs. the S&P 500: Growth of $100 (1965–2025)
And more!
NEWS
Standout Stories
🏝️ These Retirees Are Thriving. What Are Their Secrets? (Bloomberg)
🦾 Did AI Kill Coast FIRE? (Of Dollars and Data)
₿ Trump wants you to invest your 401(k) in crypto and private equity. Should you bite (LA Times)
🪙 What Are Stablecoins Used for Today? (Federal Reserve Bank of Kansas City)
✈️ Using Airline Points to Manage Sequence of Returns Risk (White Coat Investor)
MARKET THOUGHTS
Middle East De-Escalation, Cool Inflation, and Strong Earnings Push Stocks to Record Highs
ECONOMY
Producer prices rose less than expected in March, with the producer price index (PPI) climbing 0.5% month over month, well below estimates of around 1% and matching February's revised gain. Core PPI, which strips out food and energy, rose just 0.1%, down from 0.3% in February and below the 0.5% consensus estimate. The cooler reading was driven by flat services inflation, with energy prices accounting for most of the upside in goods. Initial jobless claims for the week ended April 11 came in at 207,000, down from the prior week's revised 218,000, suggesting the labor market remains stable. Regional manufacturing activity strengthened notably in April: the New York Fed's Empire State Manufacturing Index surged to 11.0 from -0.2 in March (the highest since November), while the Philadelphia Fed's general activity index climbed to 26.7, its highest reading since January 2025. Housing remained a soft spot, with existing home sales falling 3.6% to a seasonally adjusted annual rate of 3.98 million in March, and the NAHB Housing Market Index dropping four points to 34 in April.
STOCKS
U.S. equities posted strong gains for the third consecutive week, with several major indexes reaching record highs. The Nasdaq Composite led all indexes, gaining approximately 6.84% to close at 24,468.48, while the Russell 2000 rose roughly 5.56% to 2,776.89 and the S&P 500 advanced about 4.54% to 7,126.06. The Dow Jones Industrial Average gained approximately 3.19% to close at 49,447.43, and the S&P MidCap 400 added around 3.51% to 3,646.35. Large-cap growth outperformed value for the third straight week, buoyed by continued enthusiasm for artificial intelligence-linked names. Market sentiment was lifted by signs of de-escalation in the Middle East, including an ongoing U.S.-Iran ceasefire and a declaration by Iran that the Strait of Hormuz is "completely open" for commercial shipping. An Israel-Lebanon ceasefire agreement sent oil prices sharply lower on Friday. First-quarter earnings results from major U.S. banks were broadly well received, with bank executives offering upbeat commentary on consumer spending conditions.
FIXED INCOME
U.S. Treasuries posted positive returns for the week, with yields drifting lower on Friday after the Strait of Hormuz was declared open, easing concerns about energy supply disruptions. Yields were volatile throughout the week before the late-week geopolitical developments provided a more sustained bid. High yield bonds outperformed Treasuries as improving risk sentiment, strong equity markets, and an active new-issue calendar supported the asset class. Several new high yield deals were upsized due to strong investor demand, reflecting the broad improvement in market risk appetite.
INCOME BUILDING TIP
The May 2026 I Bond Rate Is Coming Into Focus -- Should You Buy Now or Wait?
New inflation data from the Bureau of Labor Statistics allows us to predict the upcoming May 2026 I Bond rate before the official announcement on May 1st. The semi-annual inflation component for the next cycle is projected at approximately 1.67%, translating to a variable rate of around 3.34% to 3.39% depending on the fixed rate that gets set. That puts the total composite rate for new May purchases at roughly 4.26%, assuming the fixed rate lands between 0.90% and 1.00%.
If you buy before the end of April, your I Bond will carry the current 0.90% fixed rate and earn a total of 4.03% for the first six months, then step up to roughly 4.26% for the following six months. A May purchase gets you the new inflation rate immediately but comes with an unknown fixed rate -- which could land slightly higher if the Treasury follows recent TIPS real yield trends. For long-term holders, waiting until May (or even October) to see if the fixed rate ticks up makes some sense. For most people, the difference is small enough that buying in April or May gets you to essentially the same place.
I Bonds have real advantages: they're backed by the U.S. government, inflation-linked, exempt from state income taxes, eligible for tax deferral until redemption, and potentially tax-free if used for qualified education expenses. The $10,000 annual limit per Social Security number ($20,000 for a couple, more if you include trusts, LLCs, or children) keeps them from being a complete portfolio solution, but they work well as a stable, inflation-protected slice. The catch is that you can't redeem them for the first 12 months, and redemptions before five years cost you three months of interest. Always buy near the end of the month (not the last day -- give yourself a few business days buffer) and sell at the very beginning of a month to maximize interest.
One thing worth knowing going in: I Bonds can only be purchased through TreasuryDirect.gov. There is no other way to buy new issues -- no brokerage, no secondary market. The platform has its quirks: no paper statements, limited customer service, a slow account recovery process if you forget your password, and no liability coverage if your account is compromised. Estate handling can also be difficult since there's no automatic way for heirs to discover the bonds exist. None of these are dealbreakers, but they're worth understanding before you open an account. If you want inflation protection through a standard brokerage instead, individual TIPS are the closest alternative -- currently offering 2% to 2.7% real yields on longer maturities -- though they're a different instrument with different tax treatment and no annual purchase cap.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.39%
SPAXX (Fidelity Government Money Market Fund): 3.29%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.53%
VMFXX (Federal Money Market Fund): 3.58%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.90%
E*Trade: —
Fidelity: 3.95%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.95%
ETFs (30-Day Yields)
SGOV (iShares 0-3 Month Treasury Bond ETF): 3.55%
BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 3.51%
USFR (WisdomTree Floating Rate Treasury Fund): 3.61%
TFLO (iShares Treasury Floating Rate Bond ETF): 3.61%
DEALS AND BONUSES
Citizens Bank: $400 Checking Bonus with One Direct Deposit
Citizens Bank is offering a $400 cash bonus for new checking customers who make a single direct deposit of $1,000 or more within 60 days of opening. The requirements are straightforward, and the lowest-cost eligible account has no monthly fee as long as you make one deposit per statement period.
Offer Details
Main promotion: $400 bonus deposited to new checking account
Promo code: None (must open via links on the offer page)
Valid dates: April 1, 2026 through June 30, 2026
Bonus tiers: Flat $400 (no tiers)
Eligibility: New to Citizens only; primary signer may not have held any Citizens personal checking or savings account in the previous six months. Geographic restriction: CT, DC, DE, FL, MD, MA, MI, NH, NJ, NY, OH, PA, RI, VT, VA
Funding/deposit requirements: At least one single direct deposit of $1,000 or more within 60 days of account opening. P2P transfers (Zelle, Venmo, CashApp, PayPal) do not qualify
Key restrictions: Account must remain open with a balance greater than zero through the payout date. Bonus is reported to the IRS as taxable income. Payout timeline: by end of August (if opened April), September (May), or October (June)
Our Thoughts
This is a clean, low-effort bonus for anyone in an eligible state who can redirect or split a paycheck. The "One Deposit Checking" account is the move here: no monthly fee as long as you make one deposit per statement period, which you'll hit automatically with the qualifying direct deposit. At $400 for a single transaction, the effective return is strong, though the hold period (up to 4-5 months if you open in June) is worth factoring in. If you're already juggling multiple checking bonuses, Citizens works well as a set-it-and-forget-it addition given the minimal ongoing requirements.
Picture of the Week
